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Financial Insights — Saturday, January 10, 2026

News that affects your money, your health, and your future — explained by Grace AI.

Retirement Planning · Social Security

New Research Challenges ‘Delay to 70’ Social Security Consensus

Recent research highlighted by BenefitNews argues that claiming Social Security at 62 can be financially rational for many households once real-world behavior, spending patterns, and risk preferences are factored in, pushing back against the standard advice to delay to 70. This comes as other studies still show large lifetime gains from delaying, underscoring that optimal timing is highly individual.

Source: BenefitNews ·

Grace AI Grace's Take

Recent research suggests that claiming Social Security benefits at age 62 could be a smart choice for some people, especially when you consider your health and spending habits. As you plan for retirement, think about how the timing of your Social Security can work alongside your investment strategy and any spousal benefits you might have. There’s no one-size-fits-all answer, so take the time to find a plan that feels right for you and your needs.

  • •New analysis suggests early claiming at 62 can be rational when accounting for health, longevity risk, and spending preferences.
  • •The research contrasts with earlier work (e.g., NBER, United Income) indicating most households maximize lifetime benefits by delaying to 70.
  • •The debate reinforces that Social Security timing should be integrated with portfolio risk, withdrawal strategy, and spousal benefits.
Retirement Impact

If you are 1–5 years from retirement, this research supports doing a personalized break-even and risk analysis instead of blindly delaying to 70. For those worried about running out of money or markets dropping, claiming earlier to protect against sequence risk while reducing portfolio withdrawals may make sense, but you should stress-test both early and delayed scenarios under different market and longevity assumptions.

Retirement Planning · Social Security · Equities

Data Rebuts Dave Ramsey’s ‘Claim at 62 and Invest the Rest’ Social Security Strategy

A 24/7 Wall St. analysis critiques Dave Ramsey’s advice to universally claim Social Security at 62 and invest benefits, showing that early filing can reduce monthly checks by roughly 30–43% versus waiting and that most retirees would have higher lifetime income by delaying. Studies cited indicate many households leave over $100,000 of lifetime benefits on the table by claiming early.

Source: 24/7 Wall St. ·

Grace AI Grace's Take

A new analysis challenges financial expert Dave Ramsey's advice to start claiming Social Security at 62, as taking benefits early could reduce your monthly checks by 30-43%. For those nearing retirement, it’s worth considering delaying your claim to ensure a higher income throughout your retirement, potentially adding over $100,000 to your lifetime benefits. If you can wait until at least your full retirement age or even 70, you could significantly enhance your financial security as you transition into retirement.

  • •Claiming at 62 instead of at full retirement age or 70 can cut monthly benefits by about 30–43% on typical benefit amounts.
  • •A 2019 United Income study found only 6.5% of retirees get more lifetime income by claiming before 64, while 57% gain by delaying; average foregone benefits were about $111,000.
  • •NBER research suggests roughly 90% of younger workers are better off delaying, with potential lifetime wealth increases around $182,000 per household from optimized timing.
Retirement Impact

For near-retirees worried about outliving savings, this underscores the value of using Social Security as a form of longevity insurance. Instead of claiming early and taking more investment risk, many can reduce the chance of running out of money by delaying benefits, pairing that with a more conservative portfolio and a structured withdrawal plan that bridges the gap until claiming.

Retirement Planning · Social Security · Tax Policy

2026 Social Security COLA Set at 2.8% as Earnings Limits and Taxable Wage Base Increase

Social Security benefits are scheduled to rise 2.8% in 2026 via the annual cost-of-living adjustment, a modest bump over 2025’s increase. At the same time, the earnings limit for beneficiaries who work while claiming will rise, and the taxable wage base will climb to $184,500, meaning higher-income workers pay payroll tax on more earnings.

Source: AOL (via Motley Fool analysis of SSA data) ·

Grace AI Grace's Take

In 2026, your Social Security benefits will increase by 2.8%, giving you a little extra to help with rising costs, although it might not keep up with things like healthcare and housing. If you're planning to work while receiving benefits, keep in mind that the earnings limit is going up, which could affect the amount you receive. As you prepare for retirement, it’s smart to think about how these changes affect your timing decisions and to consider adjusting your investment strategy to minimize risk as you approach this important phase of life.

  • •A 2.8% COLA will lift all Social Security and SSI benefits in 2026, but may still lag medical and housing inflation.
  • •The 2026 taxable wage base increases to $184,500, expanding payroll tax exposure for higher earners.
  • •The dollar amount required to earn one work credit rises to $1,890, requiring $7,560 in annual earnings for four credits.
Retirement Impact

If you are still working before retirement, higher wage caps mean more Social Security tax but potentially higher future benefits. The COLA helps offset inflation but is unlikely to fully cover healthcare cost growth, so it is prudent to keep a healthcare reserve or HSA strategy and avoid assuming COLA alone will protect purchasing power.

Retirement Planning · Public Policy

Social Security ‘Crunch Time’ Nears as Trust Fund Depletion Approaches Next Senate Term

ThinkAdvisor reports that Senators elected in 2026 will likely be in office when the Social Security trust fund is projected to be depleted, raising pressure for reforms. While benefits would not disappear, current law would force automatic cuts if Congress fails to act.

Source: ThinkAdvisor ·

Grace AI Grace's Take

There's a lot of talk about Social Security getting close to a financial crunch by 2026, which means that if Congress doesn’t act, benefits might be reduced for everyone. If you're near retirement, this may be a good time to think about when you file for Social Security—waiting a bit longer can increase your monthly benefits. Remember, even if changes happen, your planning now can help ensure you're on solid ground, so keep focusing on a balanced portfolio and healthcare strategies until you're eligible for Medicare at 65.

  • •Projected trust fund exhaustion is now close enough that a single Senate term spans the likely crunch period.
  • •Without legislative action, benefits could be cut automatically for all recipients once reserves are depleted.
  • •Reform options include payroll-tax increases, benefit formula changes, and potentially higher full retirement ages.
Retirement Impact

For near-retirees, current benefits and near-term COLAs are still highly likely to be paid, but long-term cost-of-living adjustments and benefit formulas for younger cohorts could change. When running retirement projections, it is sensible to model a modest across-the-board cut (for example 10–20%) as a stress test.

Market Overview

Key Trends

  • Social Security claiming strategies are becoming more individualized, necessitating personalized analysis.
  • Growth in healthcare costs outpacing adjustments to Social Security benefits highlights the need for healthcare planning.
  • Market volatility increases the importance of de-risking portfolios as retirement approaches.
  • Potential reforms to Social Security benefits pose long-term uncertainty for future retirees.

What This Means for You

  • Consider a balanced withdrawal strategy that integrates Social Security timing decisions with portfolio withdrawals to minimize the risk of running out of money.
  • Utilize tools for stress-testing various Social Security claiming scenarios against market volatility and personal health projections.
  • Establish a healthcare reserve to bridge gaps before Medicare eligibility, taking inflation and rising healthcare costs into account.
  • Re-evaluate asset allocation closer to retirement, focusing on de-risking strategies to protect against market downturns.

Risk Factors to Watch

  • Potential social security cuts could impact expected retirement income.
  • Healthcare costs are rising faster than Social Security COLAs, potentially squeezing retirement budgets.
  • Market volatility could negatively affect retirement portfolios, emphasizing the need for strategic asset allocation.
  • Interest rate fluctuations may decrease bond yields, reducing fixed-income security for retirees.

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